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Labor Relations Update

¿Cómo Se Dice: “Lost in Translation”?

Posted in Decertification elections, Objectionable Conduct, Representation Elections

Labor law is filled with many technical rules, the meaning of which can sometimes can be lost in translation.  The recent NLRB decision in Labriola Baking Co., 361 N.L.R.B. No. 41 (2014), is a case in point.

During a campaign before a decertification election, an employer’s representative stated in a speech to the employees:  “If you chose Union Representation, we believe the Union will push you toward a strike. Should this occurs [sic], we will exercise our legal right to hire replacement workers for the drivers who strike.”  This was not an unlawful statement.

However, a translator hired to translate the speech for the workers – 80% of whom were Spanish speaking – used the Spanish words for “legal workers” or “legal workforce” in place of the English phrase “replacement workers.”  This led to a claim by the union that the employer tainted the election because the Spanish speaking workers, hearing that the employer had the right to hire “legal workers” or a “legal workforce,” would perceive this as a threat that their immigration status would be subject to scrutiny.

The employer countered that the speech, as written and delivered in English, had nothing to do with the workers’ immigration status.  Rather, the speech did nothing more than truthfully state the employer’s legal right to hire replacement workers during a strike.  But the Board held that because the translator was the employer’s agent, his rendition of the key phrase was attributable to the employer.

The employer further argued that even the phrase as translated by the translator did not threaten the employees with investigations into their immigration status.  Nevertheless, the Board held that given the potential vulnerabilities of the Spanish speaking workers, as well as their friends and relatives, the reference to “legal workers” or  a “legal workforce” could be very threatening to them. The Board further stated that it “must continue to fine tune its institutional ‘ear’ in order to protect vulnerable workers from immigration related threats and manipulation that violate the Act.”

The dissent agreed that the translated phrase could be attributed to the employer, but disagreed that it was threatening.  The dissent reasoned that simply because the workforce was predominantly Spanish-speaking did not support the majority’s inference that they would hear the translated words as a threat regarding their immigration status.

The lesson here is clear.  The employer, having chosen a translator spokesperson, will be responsible for the translator’s rendition of otherwise lawful speech.  Further, the Board – which evaluates statements from the standpoint of those who hear them – will “fine tune its institutional ear” to take account of the perceived vulnerabilities of the audience.

Reading the NLRB Signs at the Triple Play Sports Bar

Posted in Employer policies, Facebook, Handbook, NLRA, Protected activity, Social Media, Social Media Policies, Uncategorized

In Three D, LLC d/b/a Triple Play Sports Bar and Grille, 361 NLRB No. 31. (August 22, 2014), the National Labor Relations Board ruled that an employee “liking” a status on Facebook is engaging in protected concerted activities under the NLRA.   Employees were unlawfully terminated for ranting about the employer’s tax-withholding error, which resulted in the employees owing an unexpected sum of money to the state tax authorities.

Getting to First: Facebook “Like” as Protected Concerted Activity

In a heated discussion on Facebook, an employee “liked” another employee’s post, which included: “They [the employer] can’t even do the tax paperwork correctly!!!! Now I OWE money… Wtf!!!!”  While the NLRB determined that the “like” constituted concerted conduct with the original poster, the Board also held that the “like” expressed agreement only with that particular post.  If an employee agrees with the subsequent commentary, s/he would have to “like” them individually.  The practical implication of this appears to be that unless an employee “likes” a specific post that was work related, it could not in the ordinary case constitute evidence of concerted conduct for purposes of the NLRA.  Here, however, the post which was “liked” involved the employer’s purported handling of tax paperwork issues, and was thus a protected form of employee communication seeking mutual support to improve their terms and conditions of employment.

What’s on Second?  Atlantic Steel v. Jefferson Standard

The Board considered whether the employee’s speech lost protection either under Atlantic Steel Co., 245 NLRB 814 (1979), or under the standards established in NLRB v. Electrical Workers Local 1229 (Jefferson Standard), 346 U.S. 464 (1953).  Declining to follow the ALJ’s approach of applying Atlantic Steel, the Board noted that where issues arise out of off-duty, off-site social media use to communicate with other employees or third parties, Atlantic Steel is inapplicable because the standard announced in that case is “tailored to workplace confrontations with the employer.”  Here, because the underlying communications were outside the workplace, and were not directly with the employer, the Board applied Jefferson Standard to determine whether the employees’ speech was so disloyal, reckless or maliciously untrue as to lose protection under the Act.  The Board distinguished the facts here from the disparaging facts in Jefferson Standard, finding that the Facebook discussion disclosed the existence of an ongoing employment related dispute; that the communications were not directed to the general public because they were posted on an individual’s personal page; and that the comments did not disparage the employer’s products or services.  For those reasons, the employees speech did not lose the protection of the Act.

A Knuckle Ball: The Vagueness of “Inappropriate”

The NLRB reversed the ALJ’s decision to dismiss an alleged violation for the employer’s maintenance of an Internet/Blogging Policy.  Instead, the Board found that the policy violated the law.

The policy stated:

The Company supports the free exchange of information and supports camaraderie among its employees. However, when internet blogging, chat room discussions, e-mail, text messages, or other forms of communication extend to employees revealing confidential and proprietary information about the Company, or engaging in inappropriate discussions about the company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment. Please keep in mind that if you communicate regarding any aspect of the Company, you must include a disclaimer that the views you share are yours, and not necessarily the views of the Company.

As the policy was lacking in illustrative examples, the majority found that the policy’s language forbidding “inappropriate” communications in the Internet/Blogging Policy was “sufficiently imprecise” as to be overly broad.

Member Miscimarra, dissenting in part, argued that the term “inappropriate,” albeit “susceptible to different meanings,” was in fact “using an understandable catchall phrase as a general statement of policy.” In the dissent’s view, the policy only deemed discussions “inappropriate” if they violate the law.

Three Up, Three Down! The Savings Clause that Couldn’t

In light of two discharges related to protected concerted activity, the NLRB found a savings clause in the Internet/Blogging policy was “ineffective.”  The savings clause stated that: “In the event state or federal law precludes this policy, then it is of no force or effect.”  Even though the policy was to have “no effect,” the NLRB still found that the Internet/Blogging Policy would be viewed by employees through the lens of the termination of two employees for engaging in protected concerted activity.

Switch Hitter: A Lone Dissent

The dissent criticized the majority’s decision as the sort of analysis which “contributes to the uncertainty employers confront in seeking to square their rules,” which now “consists of so many distinctions, qualifications, and factual variations as to preclude any reasonable ‘certainty beforehand’ for most parties ‘as to when [they] may proceed to reach decisions without fear of later evaluations labeling [their] conduct an unfair labor practice.’”  We have previously noted the dissent’s point concerning the difficulty of employer compliance where the state of the law is unclear here, here and here.

Reading the Signs

The ruling in Triple Play Sports Bar illustrates the NLRB’s further reach into social media policies and work rules.  An otherwise insignificant “like” can offer an employee protection under the Act, even in a non-union context, such as here.  Further, the decision deals a blow to employer efforts to utilize a ”savings clause” which plainly stated that the policy would have “no effect or force” in the face of countervailing federal law.  Employers are still searching for a savings clause that will find Board approval.  It is likely that if a savings clause ever is approved by the Board, it will have to be a simply worded one, not written only for lawyers but also to be easily understood by workers.

Special thanks to Jon L. Dueltgen, Labor Associate in Proskauer’s New York office, for his assistance in preparing this post.

NLRB Divides Sharply on Employee Concerted Activity for “Mutual Aid or Protection”

Posted in NLRA, Protected activity, Section 7, Uncategorized, Workplace Investigations

In a complex, twenty-eight page opinion, a sharply divided NLRB has ruled that when an individual employee seeks assistance from fellow employees with respect to a violation under Title VII (or other workplace laws), the action is not only concerted but also presumptively for the purpose of mutual aid or protection, and thereby also covered by the National Labor Relations Act (“Act”).  Fresh & Easy Neighborhood Market, Inc., 360 NLRB No. 12 (2014).  This decision is important because it broadens the activities which are protected under the Act and potentially complicates employer investigations into allegations of sexual harassment or other conduct alleged to have violated a variety of federal, state and local workplace laws.

The heart of the legal dispute in the case is found in Section 7 of the Act, which sets out the protected rights of employees under the Act:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3). [Emphasis added.]

For many years, the NLRB has held that under Section 7, there is a separate analysis for whether employee conduct was “concerted”, and if it was, whether it was ”for the purpose of . . . mutual aid or protection.”

The case here involved both questions.  In summary, it involved an individual employee who felt that she was being sexually harassed by remarks directed at her that had allegedly been written on a “white board” by a manager.  In order to preserve evidence of what was written on the white board before it could be erased, the offended employee copied it on paper and asked fellow employees who had seen the writing on the white board to sign her paper.  This was presumably to preserve and establish collaborative evidence of what had been written on the white board.  There was no evidence that the offended employee was seeking to initiate group action or solicit a common complaint from her fellow employees.

Following an investigation by the employer, and resulting actions with which the offended party was dissatisfied, she file an unfair labor practice charge and the General Counsel of the NLRB issued a complaint.  As a threshold matter, the Administrative Law Judge ruled that the offended employee had neither engaged in “concerted activity” by seeking the signatures of her fellow employees, nor sought to make common cause to initiate any group action, such that there was no purpose of “mutual aid or protection.” Based on these determinations, the ALJ dismissed the complaint.

The NLRB reversed the ALJ in a 3-2 decision.  The NLRB majority, joined by one dissenting member, held that the offended employee did engage in “concerted” conduct by requesting the signatures of the other employees.  The sharper split was over the NLRB’s further finding that the offended employee’s “concerted” conduct was for “mutual aid and protection”.  Essentially, the Board majority held that because she was seeking protection from sexual harassment under a statute (Title VII) applicable to the employer and its employees, her conduct was inherently for the purpose of “mutual aid or protection”, and no further proof of that was required.  To the extent that Holling Press, Inc., 343 NLRB 301 (2004) is to the contrary on the “mutual aid and protection” issue, the Board overruled it.

Both of the dissenting members vigorously disagreed with the majority’s conclusion that taking action to vindicate individual rights under a workplace statute inherently constitutes ”mutual aid and protection”. The complexity of the facts and the discussion back and forth between the majority and the dissenters are far more than can be fully described in this blog. But aside from the legal analysis, both dissenting members noted that if seeking to vindicate rights under another workplace statue was presumptively for “mutual aid or protection”, then in many cases an employer’s investigation into the allegations would be freighted with all sorts of “process limitations” imposed under the Act.

Member Miscimarra’s dissenting opinion listed these bottom line practical problems in some detail:

Unlawful Interrogation. The NLRA broadly prohibits the questioning of employees regarding “protected” activities. Under my colleagues’ holding, the employer, though obligated  to conduct an investigation and take remedial action under substantive laws like Title VII of the Civil Rights Act of 1964, is prohibited under the NLRA from questioning employees—including the person who presented the complaint—about the “protected” activity.

Unlawful Surveillance. The NLRA prohibits employer surveillance of “protected” activities, as well as comments or actions that create the impression of surveillance. Yet, employee complaints often involve disputes over what occurred or was communicated by or between employees. Under my colleagues’ holding, fact-gathering regarding such disputes will become difficult or impossible, because the NLRA renders unlawful most video or audio surveillance, email system searches, and similar investigative efforts regarding “protected” conduct.

The Right to “Refrain From” Protected Activity. If particular conduct is “protected,” Section 7 affirmatively protects the right of employees to “engage in” the conduct and to “refrain from” engaging in the conduct.  Thus, if an employee’s individual complaint involves “protected” conduct, the complaining employee or co-employee witnesses may invoke an NLRA-protected “right” to “refrain from” answering questions and providing relevant information, even if the relevant claim involves a sexual assault associated with a sex harassment complaint, for example, or a work-related injury or fatality implicated in an OSHA complaint. work-related injury or fatality implicated in an OSHA complaint.

Difficulty Knowing Which Individual Complaints Are “Protected.” Under my colleagues’ holding, Section 7 will cover all individual complaints that implicate statutory rights, but only if there is “concerted” activity by two or more employees. Yet, because the NLRA prohibits interrogation about “concerted” activity, employers cannot lawfully make inquiries sufficient to determine which individual complaints are covered by Section 7, and which are not.

Large Number of Individual Complaints Affected. Co-employees predictably will be the most frequent source of information about employment-related complaints, and their involvement may occur in numerous ways and at different times. Therefore, under my colleagues’ holding, nearly every investigation involving individual complaints will present difficult questions about whether or when the NLRA process-based restrictions are triggered.

Inability to Establish Standard Complaint-Handling Procedures. Conventional cases involving “protected” activity often give rise to difficult questions about whether the employer has knowledge of the activity. Yet, as noted above, the Act prohibits employers from making inquiries about “protected” activity, so employers cannot readily ascertain whether or when the NLRA applies to individual complaints, even if they exclusively invoke non-NLRA rights. Therefore, under my colleagues’ holding, employers will be unable to adopt a standard process for handling and investigating individual complaints unless they treat every individual complaint as being “protected” under the NLRA.

Slip op. at 21 (emphasis in original; footnotes omitted).

That said, there was some possible good news in the decision, as all the NLRB members agreed that two instructions given by the employer to the offended employee during the investigation of the incident did not violate the Act.  First, the employer had asked the offended employee why she had requested her fellow employees’ signatures on the paper on which she had copied the offended white board material. The employer also requested that the offended employee not take any more witness statements herself, pending completion of the employer’s investigation; however, the employer specifically stated that the offended employee could discuss the matter with her fellow employees and seek their assistance as witnesses.

In many instances, such directives or questions might be found to violate the Act as an interference with the employee’s right to seek the help of fellow employees. Here, however, the NLRB found that because the employer’s question and instruction was narrowly tailored to protect the integrity of the investigation, and was accompanied by the assurances, that there was no interference with protected rights that would violate the Act. Unfortunately, the majority noted several times that its holding on these issues was limited to “the facts of this case”.  This came as cold comfort to the dissenters, who pointed out that no employer could be sure that similar questions or directives under the facts of a future case would not be found unlawful, even as they try to carry out their responsibilities under a host of other federal, state and local workplace laws.

*********

As Member Miscimarra pointed out in his dissent, over seventy years ago the Supreme Court stated:

[T]he Board has not been commissioned to effectuate the policies of the [Act] so single-mindedly that it may wholly ignore other and equally important Congressional objectives. Frequently the entire scope of Congressional purpose calls for careful accommodation of one statutory scheme to another, and it is not too much to demand of an administrative body that it undertake this accommodation without excessive emphasis upon its immediate task. 

Southern Steamship Co. v. NLRB, 316 U.S. 31, 47 (1942) (emphasis added).

The NLRB plays an undoubtedly important role in federal workplace policy that has stood the test of time.  But, as the decision discussed in this blog illustrates, for some time now the NLRB has been reluctant, to the point of refusing, to balance its important role in enforcing rights under the Act with the rights and enforcement processes set out under other federal, state and local laws.  The refusal to strike this balance can unnecessarily complicate employer compliance efforts under those other federal, state and local workplace laws, and potentially diminishes the effectiveness of those other laws as well as the Act itself.

ALJ Declares NLRB’S Dues Checkoff Termination Decision a Dead Letter

Posted in Uncategorized

In WKYC-TV, Inc., 359 NLRB No. 30 (2012), the NLRB overruled 50 years of precedent under Bethlehem Steel, 136 NLRB 1500 (1962), and held that going forward, employers could not unilaterally end dues checkoff at the expiration or termination of a collective bargaining agreement.  There was no appeal in the WKYC case because the Board applied the new rule prospectively only, and not to WKYC-TV itself or to any other pending cases.

Now an ALJ has ruled that the WKYC decision was not controlling precedent because it had been decided by a Board panel that was invalidly appointed under the Supreme Court’s decision in NLRB v. Noel Canning et al., 134 S.Ct. 2550(2014).  In Lincoln Lutheran of Racine, No. 30-CA-111009 (August 11, 2014), the ALJ ruled that the employer’s unilateral termination of dues checkoff upon expiration of the collective bargaining agreement was lawful under Bethlehem Steel and that the Board had not had jurisdiction to issue the decision in WKYC and overrule Bethlehem Steel.

It is a foregone conclusion that the current Board will eventually endorse the rulings of the invalid Board which sat during 2012 and most of 2013.  And the vehicle for doing this and overturning Bethlehem Steel a second time appears to very likely be the Lincoln Lutheran case itself, assuming that the NLRB General Counsel files exceptions to the ALJ’s decision.

But even though the Board will very likely overrule Bethlehem Steel again, it is up in the air whether it would apply the new law prospectively only for a second time; or whether the Board would apply the new law to currently pending cases (including the Lincoln Lutheran case itself).  The test is whether or not a retroactive application of the new rule would  create a manifest injustice.  Query whether, because of its history of trying to overturn Bethlehem Steel, the Board might now apply a decision doing so retroactively and hold it was not manifestly unjust.

The Lincoln Lutheran decision may be a precursor of others by ALJs, applying similar reasoning to undermine precedent set by the invalidly appointed Board.  Eventually, the issues they raise will have to be sorted out by the Board itself, and possibly the courts.

NLRB Work Rule Decisions Continue to be a Mixed Bag

Posted in Handbook, NLRB, Social Media Policies, Uncategorized

As the NLRB continues to wade through the pool of issues arising from social media policies and other workplace rules, an Administrative Law Judge’s recent decision in Cellco Partnership d/b/a Verizon Wireless (July 25, 2014) illustrates the growing number of problems employers face in developing corporate policies and the variability of NLRB decisions. In this case, Cellco Partnership and Airtouch Cellular had mixed success in defending their work rules against alleged 8(a)(1) violations.  Specifically, the ALJ ruled in the following ways with respect to corporate policies that forbade employees from:

  • Engaging in solicitation during work time, distributing nonbusiness literature in work areas at any time and using company resources (such as emails, computers, telephones and fax machines) for solicitation or distribution purposes
    • The ALJ upheld this rule, finding that employees have no statutory right to use an employer’s equipment for personal matters.  Citing Register-Guard  (Dec. 16,  2007), ALJ Cates opined that email systems constitute employer property, and are thus subject to restrictions under employers’ “right to regulate and restrict the use of company property.”  Based on the ruling in Register-Guard, ALJ Cates declined to consider the applicability of the Republic Aviation (Jan. 10, 1945) framework, which would have balanced the employee’s Section 7 rights with the employers’ disciplinary interests, concluding that it was for the Board to determine whether the precedent should be altered.  It should be noted that the Board is currently considering the issue of whether employees should have a right to use an employer’s email to engage in protected activity in Purple Communications, Inc. (Cases 21-CA-095151, 21-RC-091531 and 21-RC-091584).
  • Accessing, obtaining or disclosing another employee’s personal information unless acting for approved business purposes
    • The ALJ found this rule to be unlawfully overbroad.  Employees could reasonably conclude the rule to restrict their Section 7 rights in discussing terms and conditions of employment with co-workers and nonemployees, such as union representatives.  The ALJ also noted that a number of previous Board decisions found that nondisclosure policies prohibiting the sharing of employees’ addresses, telephone numbers and email addresses violate Section 8(a)(1) of the Act.
  • Recording, photographing or videotaping another employee without that employee’s knowledge and approval
    • The ALJ found this rule to be valid, finding that the use of recording devices is not a protected activity under Section 7.  ALJ Cates held that there was no basis to believe that the rule was intended to restrict the exercise of Section 7 activities, nor could it be interpreted by a reasonable employee to do so.  The ALJ noted that the rule does not outright ban the use of recording devices, but rather requires employee consent, which a union could easily obtain by requiring members to sign a waiver.
  • Releasing nonpublic company financial information to the public, third parties, or internet forums
    • The ALJ upheld this rule, finding that a reasonable employee would likely understand it as a subset of a rule on “Safeguarding Company Information.”  It is clear that this rule deals with  protecting information that could lead to the buying and selling of securities, and not information pertaining to terms and conditions of employment.
  • Disclosing nonpublic information to employees and former employees without authorization
    • The ALJ upheld the rule, finding that, as formerly discussed, nonpublic information was clarified by a previous rule to refer to inside information that could affect a person’s decision  to buy or sell securities or intellectual property rights.  Since it does not pertain to employees’ discussion wages or terms and conditions of employment, it does not unlawfully restrict Section 7 rights.
  • Using company systems (such as email and internet) to engage in activities that are unlawful, violate company policy, or cause liability or embarrassment to the company
    • The ALJ ruled that because the policy restricts the use of company systems without discriminating against Section 7 rights, it is lawful under Register-Guard.  Additionally, the rule is narrowly drawn and includes clarifying examples as to what conduct would cause company embarrassment, such as pornography, gambling, obscene or offensive content, and thus would not be read by a reasonable employee to restrict Section 7 activity.
  • Using the company brand and logo outside approved corporate identity specifications
    • The ALJ found this rule unlawful, but noted the conflicting holdings on the issue.  The ALJ cited Pepsi-Cola Bottling Co. (Feb. 28, 1991), which held an employer’s prohibition of wearing company uniforms while engaging in union activity was unlawful without a legitimate business purpose—especially since it was promulgated in response to union activity.  On the other hand, in Flamingo Hilton-Laughlin (Nov. 30, 1999), the Board distinguished the precedent in Pepsi-Cola and dismissed allegations that a policy prohibiting employees from wearing work uniforms outside company premises was unlawful, since there was no evidence of discriminatory intent.  The ALJ noted that although there was no indication of anti-union animus in this case, the rule’s overbroad nature unlawfully restricts employees’ Section 7 rights. Under this policy, employees would be unable to display a company logo as part of their communications, such as on leaflets or picket signs dealing with an employment related dispute.

The ALJ’s decision demonstrates the importance of considering individual work rules within the context that they are presented.  As in other cases, the employer’s inclusion of specific examples to clarify policies may be used to support the argument that employees would not interpret work rules in a manner that infringes on their Section 7 rights.  Additionally, the importance of “considering the employee Code of Conduct as a whole” was integral in the ALJ’s upholding of multiple policies that applied to lawful conduct clarified in previous rules.

The ALJ’s decision also highlights the issue of competing precedents, particularly relating to rules that govern the usage of company brands and logos outside of the workplace.  As discussed in the opinion, the precedents set by Pepsi-Cola and Flamingo Hilton-Laughlin have led to divergent decisions in subsequent cases (see, e.g., Shadyside Hospital (April 19, 2013) (holding that under Pepsi-Cola, a rule banning usage of the company logo in social media posts without written permission is unlawful because restricts Section 7 rights) and General Motors, LLC (May 30, 2012) (finding a similar bar on usage of the company logo lawful under Flamingo Hilton-Laughlin, given an absence of unlawful promulgation or discriminatory application)).  

Similarly, work rules regarding the prohibition of recording conversations have also been subject to opposing rulings (see, e.g., Whole Foods Market (Oct. 30, 2013) (upholding rule forbidding recording of conversations with a recording device) and Professional Electrical Contractors of Connecticut (June 4, 2014) (striking down rule prohibiting recording)). While the growing number of decisions on work rule cases may help to remove some of the ambiguities in this area of the law, the seeming inconsistencies in case results and guidance often leave questions of legality that can prove as perplexing for ALJs as they are for employers.

 

Special thanks to Jon L. Dueltgen, Labor Associate in Proskauer’s New York office, and Cornell ILR Intern­­ Laura Bakst for their assistance in preparing this post.

Department Store Units Decided Under Specialty Healthcare

Posted in Bargaining units, Collective Bargaining, NLRA, NLRB, Specialty Healthcare

This week the NLRB decided two cases involving union organizing in large department stores.  In each case an NLRB regional director applied the Board’s Specialty Healthcare test to determine whether the bargaining unit requested by the union was appropriate.  In Specialty Healthcare, the Board held that a unit will be presumptively appropriate for collective bargaining if it consists of (1) an identifiable group of employees (2) who share a community of interest. 

Under Specialty Healthcare, employees are generally deemed identifiable as a group based on the employer’s organizational structure such as shared job titles or departmental organization.  Employees are said to share a community of interest based on such factors as common supervision, working conditions, location, hours and the like, so that it makes sense for the employees to be represented in one unit for collective bargaining purposes. 

In one of the cases, Macy’s, Inc., 361 NLRB No. 4 (2014), the Board affirmed the regional director and found a group of employees who sold cosmetics and fragrances to constitute an appropriate bargaining unit.  In the other case, The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, 361 NLRB No. 11 (2014), the Board reversed the regional director and found that the employees selling women’s shoes did not constitute an appropriate bargaining unit.

The difference in outcomes lies with significance the Board placed on how the respective employers organized their employees for administrative purposes.  The Board found that the unit of cosmetics and fragrances employees in Macy’s conformed to the departmental lines established by the employer, i.e., the cosmetics and fragrances employees were all in the same department, and they also shared other sufficient community of interest factors.  By contrast, in Bergdorf Goodman the Board found that the women’s shoe employees were housed in two different departments and did not share other community of interest indicia sufficient to offset that fact.

The takeaway here is not that the Board is retreating from Specialty Healthcare, but that the Board applied Specialty Healthcare with particular emphasis on the way in which each employer grouped its employees for administrative and organizational purposes.  This factor will be weighed heavily with other community of interest factors, and may be the key factor in any given case.

 

NLRB Overturns Decert Election Based On Employer’s “Promises” Of 401(k)

Posted in Decertification elections, Employer policies, Handbook, NLRA, NLRB, Section 8(a)(1), Uncategorized

The last few months have seen very little in the way of NLRB decisions.  The recent Supreme Court decision  where the recess appointments to the NLRB were invalidated, likely will further slow down the process of issuing decisions.

Still, the NLRB has had a full complement of members for almost a year, and the agency manages to push out some decisions.

The Board recently overturned a decertification election where the union lost in a close vote of 69 for and 70 against the union, with 3 challenged ballots. based on a novel interpretation of some language in the employer’s handbook.  In UniFirst Corporation, 361 NLRB No. 1 (July 15, 2014) the employees petitioned to decertify their union.  During the campaign leading up to the vote, representatives of the employer pointed out to the employees how the unrepresented employees were able to participate in the employer’s 401(k) program.  The employer made statements to the effect of, “trust him, vote no and take their union dues and put them into the” existing 401(k).

The Board found statements like these to be an implied promise to grant a benefit “because the evidence shows that the Employer specifically linked the receipt of the 401(k) and profit-sharing plans to voting against the Union in the upcoming decertification election.”

But was such a statement an implied promise?  It would seem to depend on whether all unrepresented employees were automatically eligible to participate in the existing 401(k); if so, the employees would be allowed to participate if they ended representation.  There would be no promise because the employer was merely pointing out a fact.

The Board majority reasoned the employer’s statements were a promise, and therefore objectionable, based on an interesting interpretation of the employer’s handbook.  The Board majority stated:

 Here, neither the Employer’s handbook…., nor any other evidence shows that….the Employer was required under its plans to automatically cover employees if they decertified the Union.  Indeed, the handbook’s statement reserving to the Employer the discretion to modify or terminate the retirement plans weighs against a finding that the benefits were automatic.

Thus, the Board uses the handbook in two ways that likely were not contemplated by the employer.  First, it reasoned that the absence of language that an employer was “required” to ”automatically cover” employees necessarily means that it would have to take some additional action to grant the benefit if employees chose to decertify.  The Board found it objectionable that the language in the handbook was not explicit enough even though the handbook explained the eligibility requirements.  Second, the Board interpreted the existing reservation of rights language in a manner that is new.  Thus, the Board interprets that language as actually saying that the employer was offering to do something new for employees if they ended union representation.  This interpretation is entirely hypothetical and contrary to practice.

Every handbook states that its contents can be changed.  Such statements are common and necessary.  The operative inquiry should have focused on the reality (whether the unrepresented employees all were eligible to participate in the 401(k)), and the plan document itself, which would explain eligibility requirements.  Most 401(k) documents explicitly state, for instance, that employees who are represented by a union are not eligible to participate; therefore, ending representation would have given rise to eligibility.  This means means no additional “grant” of the benefit by the employer would have had to occur, it would have been automatic.  The employees’ actions in voting out the union would have made them eligible, not anything the employer would have had to do.  Moreover, it is doubtful that the reservation of rights in a handbook could be translated into discretion to change the 401(k) plan document, which has its own requirements for modification.

Member Johnson, in a dissenting opinion, recognized the distinction, noting, “[h]ere, as found by the hearing officer, the Employer informed employees–in the give and take of voluntary employee meetings–about benefit plans it offered to unrepresented employees.”  Member Johnson concluded the evidence in the record did not support the objection to the election:

 I conclude that the Employer simply informed employees of the ‘historical facts’ regarding benefits that were available to unrepresented employees.  Indeed, contrary to my colleagues, I believe that the employee handbook in the record unequivocally shows that employees would automatically be eligible for these benefits, by the terms of the Retirement Savings plan, subject only to length of service requirements applicable to all nonunit employees.  The fact that the Employer has the authority to modify or terminate retirement benefits for all covered employees is irrelevant.  Such a reservation of rights is commonplace in employee benefit plans.  There is no evidence whatsoever that the Employer has or would choose to exercise discretion to change eligibility requirements, change vesting rights, or deny coverage to any subgroup of nonunit employees.

Of course, as we have pointed out in previous posts, there are many obstacles to allowing a group of employees to simply vote out its union representative, so the case is not at all surprising.  It is another example of the Board’s tendency to focus on a few words in a policy and apply meaning without regard to context or intent.

Bubba Gump Shrimp’s Social Media Policy Passes Muster, ALJ Says

Posted in Uncategorized

In Landry’s Inc., Case No. 32-CA-118213 (June 26, 2014), an NLRB Administrative Law Judge (ALJ) found a social media rule concerning its wholly owned subsidiary, Bubba Gump Shrimp Co. Restaurants, Inc., to not violate the NLRA.   The General Counsel had alleged that the following policy infringed on employee’s rights because, purportedly, it would tend to prohibit employees from discussing terms and conditions of employment with coworkers or third parties:

While your free time is generally not subject to any restriction by the Company, the Company urges all employees not to post information regarding the Company, their jobs, or other employees which could lead to morale issues in the workplace or detrimentally affect the Company’s business. This can be accomplished by always thinking before you post, being civil to others and their opinions, and not posting personal information about others unless you have received their permission.

The ALJ disagreed, and sensibly interpreted the policy, as a whole, to mean that morale problems can be avoided by being civil to one another, rather than outright forbidding speech on job-related issues.  In other words, it is not the job-related subject matter which is being regulated so much as the manner in which it is being discussed and debated.  In ultimately dismissing the complaint in its entirety, the ALJ noted it would be more punitive than remedial to find a violation of an older version of the handbook which had an arguably-ambiguous copyright infringement policy, since it was no longer issued to employees.

This decision underscores the fact that even though the General Counsel may be the gatekeeper for prosecuting social media and work rule cases, ALJs and the Board may very well, at the end of the day, find these policies consistent with the Act.

 

Special thanks to Jon L. Dueltgen, Labor Associate in Proskauer’s New York office, for his assistance in preparing this post.

General Counsel Office Advocates Dramatic Change to Joint Employer Standard

Posted in General Counsel, NLRB

Earlier this year, in the case of Browning –Ferris Industries of California, Inc., 32-RC-109684, the NLRB invited parties to submit briefs on whether the Board should change its long-held standards for assessing when two separate entities should be treated as “joint employers”.   Late last week, the Board’s General Counsel submitted a brief advocating for a change to the three decades old joint employer standard.  If the General Counsel’s view is accepted, it could have significant repercussions for employers in virtually every industry.

For the past thirty years, the Board has determined whether two separate entities are joint employers under the Act by assessing whether they exert such direct and significant control over the same employees such that they “share or codetermine those matters governing the essential terms and conditions of employment . . . .”  TLI, Inc., 271 NLRB 798, 798 (1984).  To make this determination, the Board evaluates whether the putative joint employer “meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction” and whether that entity’s control over such matters is direct and immediate.  TLI, Inc., 271 NLRB at 798 (citing Laerco Transp., 269 NLRB 324 (1984)).  That standard has been challenged on several occasions in the past, but the Board majority, in both Democratic and Republican administrations, adhered to the direct control standard.

Asserting that the existing standard undermines fundamental principles under the Act, the General Counsel’s office urged the Board to adopt a broader “totality of the circumstances” test  – -  finding joint employment whenever a putative joint employer “wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence.”  The proposed test (which the General Counsel has inappropriately characterized as a return to a “traditional” joint employer standard) would ensnare entities with only indirect or worse, only potential control over the employee’s terms and conditions of employment.  In the General Counsel’s view, this change is needed to take into account the “industrial realities” where a party is necessary to meaningful collective bargaining.  As specific examples, the General Counsel’s brief specifically identifies entities contracting for temporary or contingent workers, franchisors, and companies that outsource functions integral to the business as targets for its broadened joint employer standard.

A change to the joint employer standard, even one that is less dramatic than that advocated by the General Counsel, can have widespread impact across virtually every industry.  More than a dozen other briefs were filed by employer and labor associations taking positions on all sides of this hot button issue, including a brief filed by this firm on behalf of the Coalition for a Democratic Workplace and fourteen other business associations advocating to retain the existing standard and not jettison thirty years of settled law.

We will continue to monitor this issue and will report on new developments.

Supreme Court Invalidates Recess Appointments To NLRB: Several Labor Board Decisions Now In Doubt

Posted in Collective Bargaining, NLRA, NLRB, Recess appointments, Unfair Labor Practices, Workplace Investigations

In a rare 9-0 decision issued today, the United States Supreme Court invalidated the recess appointments President Obama made to the NLRB on January 4, 2012, while the Senate was in a three day recess.  The decision in National Labor Relations Board v. Noel Canning (USSC June 26, 2014) means that the NLRB was operating without the requisite three member quorum for a significant period of time in which it issued sweeping changes to NLRB case law.  We have addressed this issue many times in our blog here, here, here and here, among others.

The Supreme Court decision goes into detail explaining the purpose of the Recess Appointments Clause of the United States Constitution.  Justice Breyer, who authored the opinion noted, to say the very least, this was a case of first impression:

We have not previously interpreted the [Recess Appointment] Clause, and, when doing so for the first time in more than 200 years, we must hesitate to upset the compromises and working arrangements that the elected branches of Government themselves have reached.

The Court invalidated the recess appointments on substantially narrower grounds than the DC Circuit’s prior opinion.  The court held that a recess lasting only three days, or even as many as ten days, was not long enough for a president to exercise the recess appointment power.  The opinion strongly suggests, however, that recesses of longer than ten days might be sufficient.

The real significance, of course, is that a number of decisions rendering sweeping changes to the interpretation of the National Labor Relations Act were rendered by Labor Board panels comprised of at least one individual out of three whose recess appointment has now been deemed invalid.  This means that those decisions, for the time being, are rendered a nullity and the law as it existed prior to the decisions being rendered should be applied, which necessarily would result in a resetting of many cases.  Of course, it is more complicated than that.  Chairman of the NLRB Mark Pearce was on all of those panels (holding the only valid appointment) and so it seems likely that many of the decisions will be re-affirmed by the current Board which is comprised of Senate confirmed, valid appointees.

Among the decisions that have been called into doubt are:

Alan Ritchey, Inc., 359 NLRB No. 40 (Dec. 14, 2012) – imposing an obligation to bargain over the “discretionary” aspects of discipline prior to issuance in cases where the union is newly certified and bargaining for an initial contract is underway.  We previously wrote about this decision here.

WKYC-TV, 359 NLRB No. 30 (Dec. 12, 2012) – where the NLRB discarded over 50 years of precedent and held that dues checkoff clauses survive the expiration of the agreement.  We covered this decision here.

Fresenius USA Manufacturing, Inc., 358 NLRB 138 (Sept. 19, 2012) – holding that while an employer’s investigation into a harassment complaint was entirely lawful, its discipline of a union member for writing a vulgar term was unlawful because the activity was “protected” by the NLRA.  We provided the details to this decision here.

American Baptist Homes of the West, 359 NLRB No. 46 (Dec. 16, 2012) – Requiring employers to turn over witness statements as part of the duty to provide information to the union, overruling longstanding precedent stating such statements could be withheld.  We previously discussed the case here.

Many employers are currently defending cases before the NLRB that involve invalidated decisions.  How these cases are handled going forward remains to be seen. For example, employers that did not engage in pre-discipline bargaining during the period between certification and a new agreement for all intents and purposes acted in accordance with the law that existed at the time the decision was made. Yet many face complaints based on Alan Ritchey, Inc., which is no longer valid.  What ultimately will happen in cases like that remain to be seen.

Also, a number of Regional Directors were appointed during the period the Board lacked a quorum.  It is likely many of their decisions made during this period will be challenged as well.

Chairman Pearce issued a terse press release about the Supreme Court’s decision, which does nothing to describe what will happen next.   Stay tuned, more on this issue will come in the next several weeks.

It is perhaps ironic that a Supreme Court decision which clarifies so much on the presidential recess appointment power also raises so many questions going forward.  As we navigate this period, we will cover the developments here.